Bureau Of Economic Analysis Shows Why Copyright Terms Should Be Greatly Diminished

from the half-life-of-economic-usefulness dept

We've pointed a few times in the past to a chart from William Patry's book, looking at how frequently copyright was renewed at the 28 year mark back when copyright (a) required registration and (b) required a "renewal" at 28 years to keep it another 28 years. The data is somewhat amazing:
As you can see, very few works are renewed after 28 years. Only movies, at 74% are over the 50% mark. Only 35% of music and only 7% of books tells quite a story. It makes it quite clear that even the copyright holders see almost no value in their copyrights after a short period of time. It appears that the Bureau of Economic Analysis is coming to the same conclusion from a different angle. As Matthew Yglesias notes, as part of its effort to recalibrate how it calculates GDP, the BEA is considering money spent on the creation of content an "investment" in a capital good, which needs to be depreciated over the time period in which it is valuable. Frankly, I'm not convinced this is the smartest way to account for money spent on the creation of content, but either way, the BEA's analysis provides some insight into the standard "economic life" of various pieces of content, which match up with the chart above in many ways.
The most ephemeral cultural works turn out to be musical records, which depreciate at a staggering annual rate of 26.7 percent—meaning they earn a huge share of their lifetime income in their first year of release, and only a tiny number of works have a meaningful level of back-catalog sales. Television shows come next, depreciating at a 16.8 percent rate. Then you have books at 12.1 percent. Movies turn out to be far more durable than TV, music, or books, depreciating only at a fairly low 3.8 percent rate.
While books and music flip flop from the chart above, movies seem to be the only one, in both measurements, that have a particularly long economic life. Yglesias wonders if that's also about to change for movies, especially as studios are forced to move away from windowed releases.
The reason for that, presumably, is that movie studios are quite sophisticated about selling the same product repeatedly. First in theaters, then in DVD and pay TV stations, then to cable networks, and with simultaneous rollouts happening abroad. My guess is that when the BEA looks back in five or 10 years, they're going to find that they've miscalibrated this number because the movie industry is facing substantial business-model transformation on precisely this point. The rise of on-demand entertainment options and the falling quantity of films produced in any given year is putting pressure on traditional market segmentation practices, and this number may not hold up.
I'm not sure if that's really going to be true, especially since one of the advantages of on-demand systems like Netflix is that they open up a wide back catalog to viewers. Prior to the VCR, that was non-existent, and even with the VCR, the back catalog was limited to what a video store could hold, and old products were regularly on the chopping block. So I could see how movies could still have an extended economic life.

Still, as Andy Howard noted in alerting us to this story, this actually gives us yet another tool for evaluating a more reasonable copyright term. If the Bureau of Economic Analysis is saying that the economic life of a piece of music is just a few years, after which it's basically a zero, it seems silly, pointless and counterproductive to keep that work locked up under copyright. Instead, it would make tremendous sense to move it into the public domain, where it might be useful. As we had just discussed recently, when works are in the public domain, it often inspires more creativity as people build on the original work. From an economic standpoint, all of the time between the end of the economic life of a work and when it finally goes into the public domain is simply a massive loss to society and culture.

Filed Under: copyright terms

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  1. icon
    tomxp411 (profile), 25 Apr 2013 @ 3:22pm

    Re: Re: Re: Re: Base term on half-life of a product

    Also, what if the one doing the adapting is not the original copyright holder. Can the adaptation be considered as exercising copyright by the original holder? Does the adaptor get a separate copyright?

    Remember that the goal is to see works created and kept in print.

    The adaptation would get its own Copyright, since it's a new work. This would also serve to make the original work eligible for extension.

    I compared Star Trek and Firefly on another thread. The comparison fits here:

    Based on a 10 year inital term of Copyright, episodes of the Star Trek series would have required renewal in 1980. Since then, there have been more movies, books, spinoff shows, and video games. This is more than enough to allow the Copyright on all those works to be renewed.

    Now Firefly, on the other hand, is being all but ignored by Fox. People want to revive the TV series and even build a Firefly MMO. But Fox won't allow it, even though they're not doing anything to leverage their rights. Serenity was the last Firefly motion picture, produced in 2005. So barring any other investment by Fox, the Firefly franchise would enter the public domain in 2015. (Yes, I know there have been comics and stuff... but let's ignore that for now.)

    Under current Copyright law, Fox can just sit on Firefly forever, never doing anything about it.

    Under my proposal, Fox would have to "use it or lose it", effectively forcing them to make a decision: do we produce half-assed works just to keep the license (effectively throwing money away to no good end), do we put money in to producing a genuine effort, or do we just let the rights expire?

    Now I have to confess.. the real intent here isn't to force companies like Fox to give up Firefly, but rather to eliminate the ambiguity around orphan works or works where the ownership is in dispute.

    Look at the Robotech franchise: essentially, Harmony Gold owns all the US Copyrights for Robotech, but there are legal issues surrounding other Macross movies. So basically, Robotech and Macross are both off-limits for US distribution. My plan would end the legal fight by basically eliminating the Copyright.

    In this instance, the original Robotech TV series and the characters and artwork created for the series would enter the public domain, but any new movies or TV shows would be Copyrighted.

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